Volodymyr Kudrytskyi: We identify Uzbekistan or Dagestan, but we don’t see "two-million" sent to Moscow
Marina Danyliuk-Yarmolaieva and her guests reflect on the fallout from Mindichgate and on what else the tapes in the Midas case may be hiding.
Hello, everyone, friends! This is Censor.NET. I’m Marina Danyliuk-Yarmolaieva, and this is our podcast called "Money for Victory". We’re doing it together with our friends from the ANTS network. Here we’ll be figuring out where to find the money we need to win and for the period after victory. And for our first episode, we decided to focus on the scandal everyone is talking about – the Mindich–Chernyshov tapes. I think many of our viewers are now avidly following this grim series on NABU’s YouTube channel. So we decided to talk about it with some great guests. Joining us today is Volodymyr Kudrytskyi, the former head of Ukrenergo, a man who has recently become famous not of his own free will, but because he is being tried on trumped-up charges in Pecherskyi kangaroo court. We also have with us Illia Neskorodovskyi, you know Illia. He is an economist, and he now heads the analytical department at the ANTS network. We’ll try to track down where our money actually is. We’ve seen where it often ends up – in back offices and in sports bags. But seriously, where can we cut spending, and where can we find money for our needs? We’ll also be looking closely at how this corruption scandal might come back to bite us, for example, whether our Western partners will go on helping us, and how we should now be talking about this support, given everything that has been heard, seen and written in the international media. That’s our agenda for today.
So, gentlemen, let’s each say a few words. What are your personal impressions after listening to these tapes?
Neskhodovskyi: Here’s how it was for me. Given that for quite a long time I had been speaking about Halushchenko and about the schemes that exist, I had three possible explanations for why all this was happening. Because there was simply no reasonable, state-minded logic to it at all. The first – the simplest, and perhaps the least unpleasant – was that the person simply lacked the necessary qualifications, and was therefore making the kind of decisions he made in the energy sector.
The second was corruption. The corrupt schemes were just so obvious that the fact law, enforcement did not react to them raised very serious questions.
The third was collaboration. And through these tapes, we have essentially seen confirmation of all three. We see very low professional competence, because some of the discussions and decisions there show that they don’t even think about the consequences. Second, we see straight-up corruption plus money laundering. But I should stress that these are not some sophisticated, multi-layered schemes and chains. They are so primitive that if even one supplier had simply come forward and said: "Look, they’re demanding money from me, here are the recordings, here is everything," that would have been enough to set the process in motion. But everyone just kept paying in silence.
Journalist: Let’s note this, I’ll quote one of the tapes. The guys involved in the scheme say: "Just scare them with mobilising their staff, and then who’s going to talk?"
There is a whole range of instruments they can use there; they can change the technical specifications, and the moment they do, you immediately lose the ability to sell your products. And this is a sector where you don’t, so to speak, have a broad circle of buyers willing to purchase what you produce, so it’s clear that these enterprises are effectively monopolists from the buyer’s side. That’s the first point. Then there is the issue that once you lose your "critical" status, your staff can be mobilised, and that, of course, will again push you towards bankruptcy. To some extent, you can understand these people, but during a war the position should really be: "Listen, I’m prepared to go all the way, because our soldiers are dying right now, our country is dying, we are under constant shelling, so I simply cannot allow myself to take part in such schemes, even indirectly." And then there is collaboration, it was all just so blatant. And the aide, in general, the problem is not only about him. Take how much has been said about Tatarov – there, too, a whole slew of schemes keeps surfacing, and then there is Ukroboronprom, where Milovanov quickly ran off from. I understand perfectly well that he realises there will also be schemes there, and questions for the Supervisory Board. So for me, the feeling is not so much shock as frustration that, despite everything that has been said, all the warnings from sector experts, all the comparisons of contracts and procurement, nothing was done. You can’t just have prices that are twice as high for no reason. That means that the X2 part of the price goes into someone’s pocket and is somehow distributed.
Volodymyr, a few days before the first batch of these tapes was released, Volodymyr Zelenskyy appeared at a briefing and, speaking in English to foreign journalists, said he believed that you personally were to blame for the energy sector being unprepared for Russian strikes in this period – that you had failed to ensure that preparedness. Do you now feel at least some slight moral satisfaction, given that it has emerged that the real picture was completely different?
Kudrytskyi: It ended up looking rather ridiculous. On top of everything, when the president said this, if you look at people’s reactions on social media – even in those Telegram dump channels that are extremely loyal to the President’s Office – the first emotion they showed was laughter. Because it is very rare for the president to comment on anyone personally at all, other than his fellow heads of state. And here, suddenly, for some reason he felt the urge to say that it was specifically me – and not, I don’t know, some other person like a theatre director or the agriculture minister – who was to blame for the system in 2025 not being as well prepared for winter as one would like. Especially given that I have been out of the job for a year and two or three months already. And the events that followed create an even more disturbing impression: that the president was in fact trying to divert attention away from the person who had really been responsible for the energy sector all these years, that is, from Herman Halushchenko. So it’s a rather strange and quite unpleasant situation in the sense that it inevitably prompts these odd and not very pleasant thoughts about why Halushchenko was kept in this post for four years at all. As for what has happened and the bags of cash we have all seen – that is not shocking to me at all. I actually believe that both the bags that were found, those 4 or 5 million dollars, and the 100 million dollars that NABU and SAPO say they traced as grey or black money flowing through a cash-conversion centre, are only a small part of what was going through Energoatom alone. And besides Energoatom there are plenty of other companies influenced by Halushchenko, Mindich, Myroniuk and others. These include the lesser-known state-owned regional power distribution companies (the oblenergos), Centrenergo, and the companies that ensure the functioning of the electricity market – Market Operator and Guaranteed Buyer. I could name many more such companies. And let’s not forget the state-owned mines under the authority of the Energy Ministry. You’ll remember that a year ago Halushchenko’s deputy minister was caught with a slightly smaller bag of cash when he was taking a bribe in some café in exchange for moving equipment from a mine that was already within range of Russian forces to another state-owned mine.
This is the Hale case.
So… The point was to save that equipment and move it to western Ukraine. In reality, we are talking about huge amounts of shadow money circulating through cash-conversion centres. The only thing that truly surprised me — honestly, there were two things. First, that for some reason they were using Derkach’s office. If you guys are linked to Derkach, if you are corrupt and possibly collaborators, that’s a very peculiar idea of "conspiracy". And second, I was deeply struck by the phrase: "We’re sending two million off to Moscow." Obviously, two million dollars. First of all, who was picking up that money there? Was it Derkach himself, or someone connected to him? Were they sending money to their patron? Who in Moscow was supposed to receive those funds two weeks later? And the very fact that money from a Ukrainian strategic company is being sent to Moscow is essentially a verdict not only on this group of not-very-intellectually-developed individuals, but also on part of our law-enforcement system. Because if we are trying to establish whether someone said "Uzbekistan" or "Dagestan", spending the resources of dozens of Security Service specialists on that and trying to chase down a NABU detective in a highly dubious case which I believe is just as fabricated as the one against me — then how is it that we somehow fail to notice two million being sent to Moscow? Guys, where have you been all this time? This is surely not the first "two million" that has been sent to Moscow. We can safely assume this was not the only transaction. And that point shows that we have one part of law enforcement that can act independently and can go after anyone in this country, regardless of their position, even if they are close to the president or the President’s Office. And then we have law-enforcement bodies of the "whatever you please, sir?" variety. That "whatever you please" segment has no future. It has no right to exist in this form either, because in essence it is not protecting law and order, it is abetting the criminal.
Neskhodovskyi: I’d like to stress that the only thing worse than the absence of justice is selective justice. It’s very hard to appeal in such circumstances, when they go after a specific person and there may genuinely be some grounds. Of course, that’s not the case here — in these proceedings it is utter nonsense to put someone on trial for preventing the state from incurring losses, for stopping it from being effectively robbed, and then prosecuting them for that.
Journalist: Let’s expand on this. It’s a very important point, and it was actually the subject of my next question about the "two million to Moscow". I’ve read through a pile of posts by defence lawyers and friendly bloggers who say, "Well, friends…"
Kudrytskyi: Moscow’s not so bad, and two million isn’t that much either.
Journalist: People have always been stealing at Energoatom, there’s nothing new about that. But let me clarify one point. Yes, there was theft at Energoatom, and we understand that Energoatom has always been Derkach’s feeding trough – he headed it at one time, among other things. But why, in fact, do we have no safeguards to prevent this from happening in Derkach’s back office at the very moment when Derkach has already become a senator of the Russian Federation? I mean, this is a man who represents the government of a hostile country, a country that is killing us every single day. Where are the safeguards?
Neskhodovskyi: Safeguards are being created, and it’s a long process. The issue is that even if you have a system in place, if the person at the top wants to break it, they can. They can do it, in particular, when it comes to procurement. We have Prozorro, but in this case, the market is quite limited, limited in terms of both suppliers and buyers. If you are not thinking in terms of the national interest, and you basically have the ability to manipulate and to set conditions – either you pay us 10–15%, or we simply won’t pay you, then the system no longer works. Any tools, whether it’s Prozorro or anything else, any information, it all stops working. And that’s where appointments matter. When you already have a functioning mechanism, the only real way to make it work is to ensure that the people at the top are not those who are looking for ways to subvert it. At one time, for example, we abolished the tax police. And what emerged later – the Bureau of Economic Security, the BES – turned out to be an even greater evil, but it was then bent to someone’s will. Let’s recall Milovanov, who came in as head of the selection commission and, essentially, by breaking every rule, throwing people out over commas or some other pretexts, ensured that a former tax police officer was left in place – and that person then started building Tax Police 2.0 under the BES banner. And just look how long that system resisted the appointment of an independent head. Even though we fully understand that the middle and lower tiers there are already built into a strict vertical, ready to carry out any orders, because people were clearly not recruited there primarily on the basis of professional merit. The same thing happened here. Now they keep saying: "Let’s look at the supervisory board…" Watch how the focus shifts. Even after attention was drawn to the management board, because the "barrier" scheme cannot exist without board members. They are the only people who can decide not to pay. The chief accountant was involved, the chair of the management board was directly involved, and so on. Nothing works without them. But the first wave of anger, so to speak, is directed at the supervisory board. And at the very same time, just a few days ago, a report came out – from NACP, incidentally, whose role here is very interesting – saying that Energoatom had ticked all the boxes, gone through all the procedures and supposedly introduced some excellent anti-corruption practices and was ready to minimise any corruption risks.
Kudrytskyi: Seems NAСЗ was getting a "20" as well
Neskhodovskyi: But on the other hand, they took that OSR-based assessment and twisted it as well. I read the English version, and there they spelled out that members of the supervisory board were not being appointed, that there was resistance. Only after real pressure was applied did they act – and what did they do? They appointed two independent members and two government representatives. Milovanov and another person, who in practice made it impossible for the supervisory board to exercise oversight. So one of the ways to prevent this kind of thing is precisely where the supervisory board actually works effectively and there are people you can trust – people who will exercise control. That’s why everyone who is now, especially those from Batkivshchyna, freaking out over the existence of supervisory boards – it’s simply that their feeding trough is being cut off when there are people they don’t control. That’s why they’re losing their minds over the presence of independent experts and immediately start talking about external governance and all the rest of it.
Journalist: Let’s put it this way – we all remember the time when Yuliia Volodymyrivna was prime minister, and how often…
Kudrytskyi: A time of pure anti-corruption and bliss.
Journalist: Big companies like that were often handed over as bargaining chips – for example, to make sure Yulia appeared more often on one TV channel or another. There were stories that were shared with Ihor Kolomoiskyi as well. That will be the topic of one of our next episodes. But, Mr Kudrytskyi, before the tapes came out, you gave an interview to the BBC where you hinted a bit at how you’re invited into this kind of scheme. You mentioned an episode where people came to you on behalf of Halushchenko and asked: "Volodymyr Dmytrovych, could you maybe give a job at Ukrenergo to a good little person?"
Kudrytskyi: Barmaley.
Journalist: Can you explain how this works? How do they go about courting the official they need?
Kudrytskyi: It’s actually quite funny. First of all, you need to understand the psychological type of these people. They’re not "alphas", not some kind of Terminators, not shameless, fearless corrupt operators. They’re rather pitiful little men with soft, timid personalities. So the first conversations about this that I had with Halushchenko started as soon as he became minister and dragged Ukrenergo out from under the Finance Ministry – which, by the way, had never once interfered in the operations of any company – and into the Energy Ministry’s sphere of control. Literally two or three weeks later he invited me in and said: "Look, I’m being told from upstairs that you need to be strengthened in terms of personnel." I said: "What exactly needs strengthening? The company is a leader in procurement – here are the proofs, one, two, three. The company is a leader in attracting international loans. What’s the complaint?" He says: "Well, you see, we’d like you to replace your head of security. There’s this good little guy." I replied: "We have an open competition. If the Supervisory Board decides to replace someone – fine, goodbye. If you have complaints, just show me where people have done something wrong. I’ll be the first to fire them." Then they wanted to sack the head of procurement, Maryna Bezrukova, who later went to serve in the JFO. After that, they needed to get rid of the technical director. And when, in 2021, this whole plan collapsed and they were driven away from the trough, the war really scared them. For the first month, while Russian forces were near Kyiv and we were synchronising the Ukrainian power system with the European grid, they didn’t touch us. About two weeks after the Russians were pushed back from northern Ukraine, Halushchenko’s first deputy showed up at my office again, shifting from foot to foot: "Well, Herman Valeriiovych wants to appoint some people." The conversation sounded more like a marketplace haggle than a serious, adult discussion about HR policy in a strategic company. In the end, I had dozens of meetings with Halushchenko and his various minions, where I was asked to appoint all sorts of little men – including some rather murky SBU officers who had worked with Derkach and were known for nothing else in their lives. And at one point, Halushchenko said to me furiously: "I need to have my own people in your company. He points at two people sitting in his office and says, right in front of them: "If you don’t want these two – fine, it doesn’t matter, they don’t matter to me. Give me others, tell me which positions. I just need to have my own people there so that everything is under control, and so on." And once that whole idea fell apart, we suddenly started having very serious problems with practically all the law-enforcement bodies. With the State Audit Service, for example, which is now supposedly going to independently, professionally, relentlessly, unbreakably and powerfully audit all energy companies. We started having problems with all sorts of inspectorates, with the energy regulator. Parliament set up a temporary investigative commission (TIC). TIC, too, was very "forceful" – they’re now trying to stitch up a treason case because we took on "too many" loans. So the entire machine, which has been well fed by these back offices, essentially turns on you and starts attacking. And here I’d like to say a few words about the suppliers and why they remain silent. Some may think they keep quiet because they’re feeding off the system and don’t care. In reality, the biggest glue that holds this whole construction together – this network of back offices and control over everyone – is law enforcement. It’s the threat of criminal prosecution for nothing. We’ve talked about my case, but there’s another one. The Ukrenergo Supervisory Board recently dismissed the chief executive. The very next day, Ukrenergo’s corporate secretary, who services the work of the Supervisory Board, was served with a notice of suspicion. This was literally a couple of months ago. He was accused of misusing a company car back in 2022 and allegedly causing damage of something like five or twenty thousand hryvnias. And instead of saying, "Even if something was done wrong, you can compensate the damage," they said: "No, no, no, young man, here is your notice of suspicion, here are your restrictive measures." So do you see how this works? It works like this: unreformed law-enforcement agencies are used to keep deputy energy ministers under control, along with certain appointees in energy companies and suppliers who don’t want to pay kickbacks. The fact that we still have agencies where you can just call and say "go sic ’em" has a huge impact. If that system disappears, all these back offices – even if they don’t completely fall apart and vanish – will shrink dramatically. Because the number of people willing to cooperate and collaborate with this system will drop tenfold once they stop being afraid of it. That’s all there is to it.
Journalist: That’s quite a challenge, because who wants to live worse once they’ve had a taste of the Maldives…
Kudrytskyi: Still, they did have to turn the BES from black to white – and fairly quickly at that.
Neskhodovskyi: No, no, no – that’s only the top management, as they say. There is a cleansing process under way, but I wouldn’t claim that the BEB is all white and fluffy just yet.
Journalist: They basically appointed Mr. Tsyvinsky under pressure, right? After those protests in support of NABU and SAPO, and after European partners said plainly: appoint the actual winner of the competition. But we still don’t know what their budget will be, because there are also questions regarding the draft budget.
Neskhodovskyi: They simply didn’t increase it, and as a result of certain restructuring, most likely a full-scale reform won’t happen. But we’ve already discussed this with international partners. They said they would allocate international technical assistance to ensure that the competition can go ahead.
Kudrytskyi: Those troublesome international partners, always imposing some "external oversight."
Neskhodovskyi: What choice is there if the management here is corrupt? And regarding pressure from law enforcement — remember what our businesses constantly complain to the President about. They literally beg him: please get these law enforcement agencies off our backs. During the first year of the full-scale invasion, they kept quiet, but now they’ve returned and openly demand either apartments or land. So once again, as under Yanukovych, we have this large-scale state racketeering system that targets every major business — particularly from the Security Service, since the selectivity is enormous. Here they see a passport, here they don’t see an Israeli passport; here they launch a case, here they don’t. The selective enforcement is massive.
Journalist: Cooperation with Russia — they see it or don’t see it as they please. But what did they latch onto? The fact that you were born in Russia?
Kudrytskyi: I don’t even remember anymore. They were spreading some complete nonsense — that I supposedly tried to flee, though without any foreign passports. Something like that.
Journalist: And in Tsyvinsky’s case, they dug up that his father had once divorced and moved to Russia.
Neskhodovskyi: Or take another case: you supplied to Georgia, Georgia re-exported somewhere else, and eventually it ended up in Russia and they claim they’ve "found everything." But the fact that we continue transporting Russian oil, which is a direct criminal offence, not some policy choice, an actual article of the Criminal Code and you’ve clearly written that during wartime cooperation with Russia constitutes treason. So where is the treason charge? Now they want to appoint the current Naftogaz leadership to head the Energy Ministry. My question is: they can now keep him on the hook, because they can open a case over continued transit of Russian oil and that’s it, he’s under their control. Even if he’s a competent professional, once you have a criminal case hanging over you, they can threaten you with 15 years… pick. And in the end, even a professional can be corrupted simply because they can threaten to open the case at any moment. The evidence is so obvious that any court…
Kudrytskyi: Every head of a major state-owned company like Naftogaz or Ukrenergo has dozens of criminal cases against them — and you could easily create hundreds. Cases like the one they tried to pin on me could be manufactured by the thousands. Take any Ukrenergo procurement and find someone who "incurred losses." For example: Ukrenergo sells scrap metal, someone buys it, therefore that person "incurred losses." So someone must be sent to jail.
Journalist: I’ve spoken off the record with officials who work there, and they say: "Do you know what our biggest fear is? Ending up in that glass box in the Pechersk court, being put on display like some crocodile in a zoo, and then being shamed either with huge bail or an ankle bracelet." No one wants to look like a criminal. Mr Kudrytskyi came to us wearing a bracelet. They won’t find any for the ladies from the back office. Or for Krupa.
So let’s think about how we can fix this in wartime, because in peacetime there would already be a protest outside Energoatom with people shouting "Derkach out". Where can we actually apply pressure now?
Neskhodovskyi: One of the positive stories is the appointment of the head of the BES. The only way we’ve actually managed to stop large-scale theft in tax schemes was through the electronic administration system, which reduced human involvement to a minimum. If you want to break it, you have to break the system itself – and that leaves a digital trace. And then you’re easy to track down. At the time, there were lots of conversations along the lines of: "Illia, you’re insisting on this system with international partners again? We’ll just reboot the tax service, put in new people, and everything will be fine." They keep saying exactly the same thing about customs: that they’ll appoint the right person and it will all start working. It won’t. There is a whole list of steps you have to take if you want to beat corruption. The second element is VAT refunds. Again, when the automatic e-register was launched, they went and shut it down and now we have no idea what’s going on there. You can quietly steal a couple of billion from the budget and no one will see it. Why? Because it’s impossible to trace the refunds. You can only see your own. You have no idea who else is getting paid. For example, we already know about fictitious grain export schemes, we’re talking billions. They literally stole billions. So all the Yanukovych-era schemes – and I really have the sense that the same people have come back, Derkach’s circle and the rest – they basically exhaled in relief: "Phew, that horrible period up to 2019 is over," and got to work. They started rebuilding the personnel verticals, rebuilding the schemes, acting brazenly, placing their people in law-enforcement agencies, in the Security Service, and so on. A whole dynasty, effectively. Right now, the only real option is… Well, we’ve suddenly seen a competition announced for the head of customs. We’ll see how it goes and how it ends. But a change in leadership is at least a first step towards getting something to function properly. That’s the first thing. And of course, there is pressure from society. I am genuinely grateful to our young people. Honestly, what is happening now is happening thanks, among others, to them, to those who were not afraid to go out in the summer and defend the independence of SAPO and NABU. Their presence was a powerful argument both for our international partners and for the authorities themselves. Because they still carry trauma from Yanukovych and from the Maidan – some of them were on the completely opposite side back then – and they are afraid of a repeat. And it’s good that they are afraid; that’s why we saw a reaction. And again, it all comes back to changing the leadership.
As for legislative changes, I’ve been raising the same question for a long time. Look, you’ve raised taxes, for example, the so-called tax on oligarchs. So let’s make it 1% of their assets. They won’t become poor from that 1%; they can easily pay it. It’s not about taxing small business or anything like that. It’s not as if they’re going through hard times. Let’s introduce a tax on luxury. And then Hetmantsev comes out and says: "I don’t know what ‘luxury’ is. Here’s a watch — what if that’s luxury?" And on that basis he starts musing that we supposedly can’t tax luxury because our officials don’t even know what counts as luxury. Then it’s the same story with other things, taxing harmful products, higher excise on tobacco, alcohol and so on. That’s "impossible" too. And the President, by simply not signing the tobacco law, effectively handed our tobacco companies 2.5 billion for free. Just like that. Clearly, he doesn’t mind giving away those 2.5 billion. So what has now come to light, in my view, is just one piece of the puzzle. There are dozens of such pieces across every sector. Again, when we talk about the authorities as a whole, and about Zelenskyy personally, did he know or not know? Well then why did he sign the law to shut down SAPO and NABU if he supposedly didn’t know? He knew perfectly well. He’d already been briefed, he’d been told about the tapes, and he was afraid. But over all this time, if you were truly separate from it, then at the very least it would not have been SAPO and NABU that initiated the process, you would have. You would have said: "I have discovered that behind my back tens or hundreds of millions of dollars were being siphoned off." You would never have appointed these people. And yet you did; you appointed one of them justice minister. People can say "oh, it wasn’t him" but he is the one who makes the appointment. If he hadn’t given the green light and from these tapes we can clearly hear such conversations: "I’m ready to go anywhere", we understand perfectly well what "anywhere" meant. It meant becoming justice minister, in charge of the justice system.
Journalist: Look, we’re being offered a version of events in which no one at all knows Tymur Mindich. I tend to think the master…
Neskhodovskyi: Supposedly he was planted here by various Kremlin spies. Israel and the Kremlin, Moscow, "sent us" this Mindich.
Kudrytskyi: I would almost be willing, just for the sake of not rocking the boat, to fool myself and agree with the line we heard today — that we have a principled and uncorrupt president…
Journalist: Let me quote it, because it’s pure poetry. Andrii Yermak said this in an interview with Politico: "The president is a very principled person and is not corrupt. It was he who launched the fight against corruption and allowed completely free investigations." What do you make of a quote like that being sent out at the international level?
Kudrytskyi: First of all, I was very glad to hear that, apparently, the president can choose to allow or not allow anti-corruption investigations. That lines up very closely with my own case as well. In other words, he can allow an unlawful investigation to go ahead and block a lawful anti-corruption investigation. And secondly, fine, then the obvious question is: how did this principled, uncorrupt president end up appointing unprincipled crooks as ministers of energy, environment and justice? And not only did he appoint them, he kept them in those posts for years and shielded them from dismissal after each new corruption scandal. This isn’t the first scandal. This is just the biggest one, the one that created a tsunami strong enough to sweep these people away, and hopefully it will sweep away a few more as well. Before this, there were plenty of other scandals. There was the scandal over Energoatom selling electricity to two "respectable" trading houses, including one belonging to Kolomoiskyi? United Energy. That was back in 2020. There were corruption scandals at state-owned mines, where Halushchenko’s deputy ministers and advisers were literally caught with bags of cash. There was the scandal over those Bulgarian reactors, when parliament was forced to vote for the deal and then it turned out someone had forgotten to actually agree anything with the Bulgarians because someone else had already made their own arrangements with them. You see, there were many such episodes where any other person, even a loyal insider, would have been kicked out long ago. And yet in this case they were kept in place right up to the last possible moment, until it simply became impossible to keep them any longer.
Journalist: When the tapes were played in the High Anti-Corruption Court, the ones where Mindich is coaching Halushchenko on how to talk to Volodymyr Oleksandrovych, Volodymyr Oleksandrovych promptly took a "decisive decision" to dismiss two of his ministers. There were internal debates about whether it was appropriate to air details of their private lives, that one minister was spending the night at the other’s place. And after all those discussions I told my newsroom it was the right call, because these were participants in a corruption scheme.
Neskhodovskyi: It’s evidence of mutual dependence, and that is unacceptable between public officials.
Kudrytskyi: It’s a conflict of interest. When you’re in cabinet and you vote on a justice-sector decision while serving as energy minister, you are supposed to declare a conflict of interest. And when you’re justice minister voting on an energy issue, you’re supposed to declare it as well. In reality, they just hid Halushchenko in the Justice Ministry so that it wouldn’t be obvious that he was still influencing the energy sector.
Journalist: And from the Justice Ministry you can exert quite a bit of influence over the state registers.
Neskhodovskyi: I think a lot of people are very nervous right now. Those bundles carried markings of US banks and the Federal Reserve System, the FBI will definitely get involved. And so far we’ve only seen the Ukrainian part of the story.
The Americans will be able to trace the entire offshore chain that this money travelled through. They can see exactly who was issued what. But if the funds were then passed on to European or Ukrainian banks, that’s where the information trail starts to disappear. You can see that the money went to a particular European or local bank but beyond that, how those bundles moved further down the chain becomes practically impossible to track.
Kudrytskyi: There’s another thing people need to understand. Among US banks, we’re talking about designated institutions, not all of them even have the capacity to legally ship literal suitcases of cash to their correspondent banks in other countries. So imagine you’re a Ukrainian bank. You approach a bank in Atlanta — or where was it, Atlanta and Kansas? — you write to a bank in Kansas and say: "We’d like 100 kilograms of cash, please." It’s not as if the bank in Kansas will reply: "Absolutely, no problem at all, we know Ukraine, great country, no corruption, no back offices, here you go, we’ve loaded your 100 kilos, catch." It doesn’t work like that. They ask: "Guys, what do you need this for? What exactly are you planning to do with physical cash issued by the Federal Reserve System of the United States?" And then our people start telling them their whole life story, where they were born, christened, under what circumstances they now "need" this money and where it’s supposedly going. Roughly speaking, the Americans will be able to check whether the bank that received this cash actually used it appropriately. Because if that bank simply took the money and handed it, still sealed, to some shell company like LLC "Unitaz" or LLC "Rocket", that’s a huge problem.
Neskhodovskyi: There’s also another version which suggests that these funds were cashed out of the crypto ecosystem directly in the United States, and that the cash reached Ukraine not through banks at all, but via diplomatic pouch. The Americans absolutely hate that. For them, the movement of physical cash outside the system is… Let’s just say if it turns out that these banknotes were issued in the US and somehow ended up in Ukraine, illegally, for example, possibly brought in through diplomatic channels, then in my view, that will be a huge red flag for the Americans. There will be an investigation. And again, I want to emphasise: they will start pulling on every offshore thread for each individual involved. For every single person, who they are, where the money went, how it moved, they have the tools to trace it. And when people talk about the use of crypto exchanges, they’ll be digging through those as well. There’s really only one exchange where the movement of funds can’t be traced; with the others, even if everything is nominally anonymous, they can still reconstruct it. That’s why I’m saying this could turn into an even bigger bombshell than the current investigation. Because once they start following those trails, they’ll find not only the proceeds of this particular scheme on certain offshore accounts, but money from other schemes as well. And what frightens me most is the possibility that corrupt flows will be uncovered in funds that were supposed to be going to defence. That, to me, is truly horrifying.
Journalist: Oh, I’m sure the schemes there go way beyond 100 million.
Neskhodovskyi: Exactly, that’s what we’re talking about. The scheming is on a massive scale, and it’s horrifying. But what I very much hope is that, once there is a change in the country’s top leadership, we will insist on getting this money back. Because we’re talking about real billions here. In my view, billions of dollars that could be recovered for Ukraine from all that illicit enrichment. The amounts we’ve seen so far are, I’m sure, only a fraction of the total – just a small slice of all the corrupt schemes. Take customs alone: we estimate the losses to the state budget at around three billion dollars. Out of those two to three billion, you have to understand that this isn’t the full "take" of the system; part of it is the "discount" they offer you to keep you in the game and willing to pay. They basically say: if you pay everything into the budget, you’ll clear, say, a million dollars; but with us you only pay 500,000. So roughly half of that – about a billion to a billion and a half dollars – ends up in officials’ pockets. Which is why, compared to how zealously Zelenskyy fought customs corruption at the start of his presidency, now he practically never mentions it. He’s clearly fine with the status quo, because the money streams are flowing. And again, those streams are worth billions every year, settling into somebody’s pockets. And now let’s ask ourselves: how are we supposed to convince Europeans and Americans to keep giving us money?
Journalist: How do we persuade Americans and Europeans to keep giving us money? Last night I watched a clip of Olga Stefanishyna’s interview with ABC News. She clearly expected that question and had prepared for it – and fair play to her for that – but still. I’m sure European politicians are going to be speaking much more bluntly now. And Mr Kudrytskyi, I saw one of your stories where you and Viktoria Voitsitska and Ms Kosharnia were meeting with European ambassadors and diplomats. What do they say about all these photos, all this evidence, the recordings?
Kudrytskyi: Look, they understand the situation one hundred percent. No one buys the stories that this is all some set-up, that Mindich doesn’t exist, that "he’s not one of ours". Nobody believes that. The good news is they are not in a mood to say: "Well, you’re corrupt, sort yourselves out, we’re leaving." There is no such attitude at all. What I tried to get across to them was this. First of all, of course it’s deeply shameful – even though we had nothing to do with these crimes and in fact were on the opposite side of the barricades. As a citizen, it’s still humiliating when you have to explain to people who have given your country 200 billion euros in assistance that, you know, some of our officials are sending two million in cash to Moscow. But the key message is this: there is a society here that has shown it is healthy, with very low tolerance for corruption. The huge public outcry this scandal has caused in Ukraine shows that, mentally, Ukrainian society is European. Unfortunately, the governing layer does not match the expectations of society or the demands of the time. Right now the country is being run in a "five or six managers" format, and nowhere in the world can five or six people run an entire country. On the one hand, you have a society that is ready to defend its European choice, does not tolerate corruption and is fighting Russia. On the other, you have a small group of people who seem to have forgotten where they live. So I say to them: you are not helping Mindich; you are helping Ukrainian society defeat the Russians. Help this society also overcome the resistance of those who have lost their way. To replicate what was done with Tsyvinskyi’s appointment and with defending the independence of NABU and SAPO, it’s obvious we need to reboot the rest of the law-enforcement system so it can no longer be used to glue together these back-office networks. It is crucial that key posts in key institutions – like the National Bank, the national energy regulator and major state-owned companies – are filled through competitions where the selection panels are not controlled from above and are made up predominantly of people you can’t just call up and "ask for a favour".
People from the Rodina party, from the old OPZZh crowd, call this "external governance". I call it a safeguard – a way to protect an honest Ukrainian serving on such a panel from having the State Bureau of Investigation show up the next day, hand him a baseless suspicion notice and throw him into pre-trial detention if he votes the "wrong" way.
What we need is to shield these selection commissions from that kind of pressure. That’s why, instead of obsessing over who will be the next energy minister, I would focus on who will actually run the key energy companies, whether Halushchenko’s people there will be replaced, and whether the governance model at the energy regulator – which oversees markets worth a trillion hryvnias a year – will change. Those are the kinds of institutions that matter.
Journalist: Illia, I’d like to quote the EU’s foreign policy chief, Kaja Kallas. She has always been sympathetic to Ukraine and has usually chosen her words very carefully, even when she had to comment on some scandal here. But her reaction to these tapes was: "This is literally the money of people that should be going to the front line." Tell me, how are we supposed to talk now to diplomats of that level, who, let’s be honest, have been our advocates all these years? When Kallas was appointed, everyone said: "Great, she’s from the Baltics, Russia threatens them too, she’ll definitely support us."
Neskhodovskyi: You know, there is actually one clear upside here. Our government officials were going to the European Commission and, when it came to the reparations loan facility, they were pushing very hard to get that money with no strings attached. "How can you impose any conditions on how we use it? Just give us 140 billion. Just hand over 140 billion and we’ll use every cent of it in the most efficient way. No conditions, that would be unacceptable." When it comes to military aid, we all understand you can’t attach conditions to weapons in the same way – but everything else should come with conditions. Even if there’s no money left in the Ukrainian budget, there still have to be conditions: either you don’t steal, or you carry out reforms, or both. That’s the first point, and that’s actually a plus. Now there will be no more talk of "give us money with no conditions". And that is very good. What we will do now is prepare concrete proposals on how this should work. You say "take a tougher line" – but the point is, that’s not what we need. We need instruments, like the ones the Americans used back in the day. Step one is the question of who actually gets to appoint people – to supervisory boards and so on. From now on, the position on that will be much firmer and less negotiable. Supervisory boards will have to be formed properly, without these "two plus two" set-ups and other tricks designed to neutralise the independent experts sitting on them. Step two is audit. There will be an EU audit structure that will monitor every cent that comes in. And we will help them set it up in a way that does not involve the Accounting Chamber. They were very keen for the Accounting Chamber to be in charge of this. We explained to them: look, a relative of the president there is never going to write anything negative. Don’t count on it. As for the State Audit Service, we also told them: that won’t work either. They’ll just rubber-stamp whatever they’re told – and they already have, including complete nonsense that actually ran counter to Ukraine’s national interests at the start of the full-scale invasion, when they opened criminal cases against managers and manufacturers of Ukrainian weapons. So that’s it, they’re completely compromised. You cannot work with them. There will be another structure, and we’ll push for it to be modelled on what the Americans demanded when they allocated 60–61 billion dollars to us. They insisted on dedicated, independent audit. We’ll recommend that same model to the European Union. And conversations around this kind of audit will sound very different. They won’t be able to fob people off with pretty pictures anymore. So we have two main lines we’ll be pushing and recommending – including to ambassadors and to our partners – on how to ensure proper oversight of these funds. And of course, there will be conditions. Like it or not, there’s no other way. Will they still give us money? Yes, they will. They’ll keep providing funds, first of all because they genuinely believe in the Ukrainian people. And second, because of security. It is crucial for them that Ukraine holds the line. We’ve already been explaining this: just think about it — Ukrainians who end up under occupation and are forced to fight against Ukraine today will, tomorrow, be fighting against Europe. Picture that for a moment: armies that have gone through the crucible of a completely new kind of high-tech war, and then those same armies are turned against you. That scenario is unacceptable. That’s why, for them, it’s absolutely vital that Ukraine stands its ground.
Journalist: Many others think the same. Earlier today we were talking with Ms Svitlana about how our power engineers have gone through their own kind of war — one that European energy workers simply can’t compare to.
Neskhodovskyi: Exactly. We can see how, over there, a few power surges are enough to shut whole systems down and leave half of France sitting without electricity.
Kudrytskyi: A year ago I was on a trip to Tokyo. They took us into the control room of Tokyo’s grid operator. They had no idea who I was — just that we were a delegation from Ukraine. And straight away they started telling me how, in Tokyo, they follow and study the way Ukrainian grid dispatchers manage the power system. They have natural-disaster risks, we have wartime risks. And they said: we literally sit and look at whatever data is publicly available, we watch how our Ukrainian colleagues are doing it, and we learn from that. And they’re very pedantic about it, as you’d expect. So, there really is something to be proud of, including in the energy sector. There are people who are holding this whole system together and then there are, I don’t know, 30, 50, maybe 100 little characters who are basically dragging that reputation through the mud.
Journalist: By the way, I’ve read that the Japanese are studying the experience of our energy sector also because they’ve realised China is adjusting its own plans for potential aggression — and strikes on energy infrastructure are a very powerful weapon. Knock out a few substations feeding Japan’s nuclear plants and that’s it, the trains stop running.
Neskhodovskyi: Right now Hanna Hopko and the leadership of the ANTS National Interests Network are on a trip to Tokyo — before that they were in Seoul and they’ve brought with them our study which argues that, for China, the war in Europe is a live laboratory for training its own army. If you don’t study this experience, you are, frankly, falling behind, while China and the North Koreans are studying it very closely. Chinese generals come here, North Korean generals come here, and they analyse how this war is being fought. And given that, technologically, this is already a completely different level of warfare, anyone fighting with twentieth-century armies will lose very quickly. We’ve shared this analysis with Europeans before; this time we focused specifically on the risks for Taiwan, Japan and South Korea. What are the risks they face? We laid them out in quite some detail, and we very much hope that one form of cooperation will be not just sympathy, but a format where they come here and learn from Ukrainians how to fight, resist and stay strong in these conditions. We are entering a turbulent period in global geopolitics, with wars being launched more and more often and economic resources being redistributed. I wouldn’t rule out China deciding it also needs a "small victorious war" or one of these other states, say North Korea, gaining enough experience to realise it can knock out South Korea’s power system with drones and then push further across the peninsula. North Korea is preparing for war across the board, unlike South Korea, which is mostly focused on its economy. So I hope we’ll come back with new economic cooperation as well. Last time we secured a significant support package for the Kherson and Mykolaiv regions; this time, I believe, we’ll also achieve concrete results.
Journalist: Mr Kudrytskyi, I’d like you to explain how we should work with private donors. They have been actively helping us, including with rebuilding the energy system. The other day I read a complaint from Servant of the People MP Serhii Nahorniak, who said they had agreed on buying a transformer for Sumy region, and the private donor replied: we’ve seen how much cash you have stuffed into sports bags — buy it yourselves. How do we persuade private donors now?
Kudrytskyi: When we talk about institutional donors — state and quasi-state — there is one tool we have to use, and this may sound like a strange word to "tough guys" and hardline "statists": reputation. And that is very closely linked to the concept of trust.
If we want them to keep providing assistance to repair the damage Russia is doing to our power system, we have to understand that all that aid will go to organisations they trust. The fact is that over the entire period of the full-scale invasion, Energoatom has attracted essentially zero support, while Naftogaz and Ukrenergo have brought in billions. Ukrenergo, after the Ukrainian state itself, has secured the largest volume of assistance. That is exactly how this works. So the way to deal with donors is not to tell them fairy tales or try to play on pity — "look how badly our infrastructure has been hit". You have to show them that they can hand over their money and not end up ashamed later, discovering that the funds they provided have been stolen and stuffed into sports bags. But donors are actually a relatively small part of the resources we can tap. Their money is usually used for rapid repairs. A transformer burns out, or the turbine hall of some coal-fired power plant gets wrecked — suddenly we need 300 million hryvnias to rebuild it, and we go and ask some government to help us find that amount. The main resource our power system needs — to protect it and to replace these Soviet-era plants with a decentralised network of smaller generating units that are very hard to destroy, like the internet, where you can’t just switch off a single server and shut the whole thing down — that main resource is investment, not donor money. And when it comes to investment, the trust requirements are even tougher; the standards you have to meet are much higher. So the likes of Tenor and Rocket, in the long run, are headed, bluntly speaking, either for a remand prison or for some form of exile. Investment will go to the organisations that are trusted. And the more thoroughly and ruthlessly we now burn out this scab of corruption from the energy sector — and that is why I keep saying we need to move very quickly and replace all the executives associated with the Halushchenko–Mindich group — the better. Because otherwise no entity like, say, Centrenergo will ever attract anything: neither donor aid, nor investment capital, nor credit.And without those, purely as a matter of arithmetic, we simply cannot restore the energy sector, cannot strengthen its resilience, and cannot regain our role as an exporter of energy resources to Europe — as an exporter of electricity rather than an importer.
Journalist: On that note we’ll say "amen" and wrap up our first podcast in the "Money for Victory" project. Friends, the professionalism and reputation of the people heading our state institutions matter enormously, as does ensuring that we have not just the appearance but a real fight against corruption — corruption that is eating us from the inside and ultimately makes people abroad question whether they should be helping Ukraine in this war.
Thank you very much to everyone who watched, to everyone who sent in questions, and especially to our guests.
Let me remind you that with us today were Volodymyr Kudrytskyi and Illia Neskhodovskyi, and that this is a joint project of the National Interests Advocacy Network ANTS and our outlet, Censor.NET. Subscribe and keep watching, because we’ll go on looking for the money for victory.
